We welcome the formal acknowledgement of the Parliaments role in the appointment of the Commission Presidenta role that it already exercises in practice. It underlines the democratic accountability of the person appointed, which is not an inconsiderable point in this argument. As the noble Lord, Lord Howell, fairly admitted when he spoke to Amendment No. 12, our own European Union Select Committee made this point at chapter 4.109:

The need for the European Council to take into account the results of the parliamentary elections is not a bar to the European Council coming to its own decision as to its preferred candidate, but the Council will continue to be unlikely to nominate a candidate who could not command the parliamentary majority necessary for election. In that sense there is no fundamental change from the current system which requires the Parliaments approval of the European Councils nominee, but the practical consequences of the Treaty provisions are

as the noble Lord, Lord Howell, said, as yet unclear.

We argue that this is a good move, not a bad move. It changes very little, and I invite the noble Lord to withdraw his amendment.

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Lord Howell of Guildford: I am grateful to the Minister for his perfectly reasonable defence of the situation as we now find it; namely, that the provision is in the treaty before us. It does, however, leave one a little mystified as to why Ministers only a little while back were vigorously using arguments to the opposite effect.

Lord Kerr of Kinlochard: Would the noble Lord consider the possibility that the quotation that he advanced from Mr Peter Hain is Mr Hains view against the proposal made in the convention for the European Parliament to choose between nominees of its choosing and the European Council subsequently to be asked to ratify the choice of the European Parliamentin other words, the reverse of the procedure which the convention in the end recommended and which is in the Lisbon treaty?

Lord Howell of Guildford: I am grateful to the noble Lord, who, having been involved centrally to interpret what was decided in the convention, is obviously qualified beyond all of us. However, whichever way one slices it, there were considerable doubts about whether this would not mean, in Mr Hains words, that the whole process would get caught up in European politicsindeed, there were other quotations which I have had a self-denying ordinance not to mobilise for the Committee.

The noble Lord, Lord Kerr, also tempts me to wider observations to the effect that the convention was, in many respects, a terrible trap for British Ministers into which they attempted and failed to inject their views. That gave birth to the constitution, which is largely identical to what we are dealing with now and has led to much trouble. My own view, from the start, was that the convention was a top-down arrangement from which no good would come. It was not bottom-up, democratic or anchored in the national parliaments, and it led indeed to disaster; but that is, possibly, a debate for another day.

I listened with great respect to the noble Lord, Lord Hannay, on the United Nations example. I am not all that much comforted as the modalities are so different that I am not sure the comparison stands up. Anyway, I am informed that the European Parliament has already started lobbying, with its various groups organising to work out their prepared candidate for Commission President in 2009. That does not look encouraging if we want the Commission President to stand above it all and have the complete confidence of the Council. Still, this is what will happen. It does not thrill me at all and should not thrill those who want to see the European Union move into a more modern, flexible and decentralised pattern for the futureone able to meet the challenges of the modern world more efficiently than it can at present.

I kept off the issue of the Commissions size, although it touches this amendment and was looked at by the Committee during the last amendment. That is because my own feeling is that one cannot really question the desirability of having a smaller Commission, but what are important here are its powers rather than its size. We could have a good, large Commission or a good, smaller oneideally decided, again as government

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Ministers wanted, on the basis of the Nice treaty and not of the rejected constitution document as the outcome seems to have been. The key is always how many powers it would have, not its size.

The Minister mentions the priorities that this Commission has deliveredsome good, some really very bad. We will, no doubt, come to debate later that disastrous posture in the Commissions attempt to form a common climate and energy security policy, which has led it into supporting the biofuels scandal. That is leading not merely to scandal but real suffering and harm throughout the entire world, which is a very big price to payand underlying it is a very big policy error, magnified by the Commissions apparent support for those things.

One is left uneasy about this matter, which seems not a step forward but one sideways or back. I repeat; it leaves one baffled as to why there has been such a substantial change of view in government circles. However, since the Minister has put the case reasonablyand because this narrow point may be part of a bigger picture to which we will returnI beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 12 not moved.]

Lord Willoughby de Broke moved Amendment No. 12A:

Clause 2, page 1, line 12, after excluding insert

(i) Article 1, paragraph 18, inserted Article 9D TEU, paragraph 8, unless the Secretary of State has laid before both Houses of Parliament a statement certifying that in his opinion there is no evidence of fraud or impropriety within the European Parliament and that it is a suitable body to exercise this function; and(ii) 

The noble Lord said: In view of recent developments, Amendment No. 12A is extremely important. The Committee may or may not be aware that the European Parliament recently produced a secret, or covert, report that has uncovered extensive, widespread and criminal abuse by Euro MPs of staff allowances worth almost £100 million a year. European Parliament officials have tried to hush this up and Harald Rømer, the secretary-general of the European assembly, was asked, I believe, by Hans-Gert Pöttering, to take measures to ensure that there was no collateral damage from this report. A source said:

We want reform but we cannot make this report available to the public if we want people to vote in the European elections next year.

Only Euro MPs on the Budgetary Control Committee were allowed to see the report. Even then they had to apply to enter a secret room, which was protected by biometric locks and security guards. They were not allowed to take notes or to divulge to anyone else the contents of that report. In response to criticism of this procedure, a parliamentary official said that it was,

not secret. It is confidential.

I am happy to say that Chris Davies, a British Liberal Democrat MEP, blew the gaff on all this. He

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complained to OLAF and asked it to investigate this serious matter. He said that the findings,

most definitely fall within OLAFs terms of reference ... They are so serious that it should be assumed that criminal proceedings may follow.

That is directly relevant to Amendment No. 12A, which refers to a certificate or document stating that the European Parliament is a fit body to operate. However, it is obviously not. OLAF has now asked to see the secret report and will follow that up. I am sure that Members of the Committee on the Liberal Democrat Benches will wish to support Mr Davies, who has said that,

without transparency there was no way of checking suspicions that some members were using ... parliamentary allowances to cover their contribution,

to their pension funds, which he said amounted to embezzlement. That is a very serious charge, which, again, justifies requiring this certificate to be issued before giving the European Parliament any more powers.

The Parliament voted by a very large majority against making this report public, which is absolutely disgraceful. Mr Davies went on to say:

These votes bring discredit and dishonour upon the entire parliament. Taxpayers could be forgiven for believing there are more honest people to be found in prison than sit in the European Parliament.

That is a direct quotation from Mr Daviess official website, which I looked at this morning. Far from cleaning up their act, a majority of MEPs seem to think that they are allowed to put their fingers in the till and carry on enjoying the gravy train, which is outrageous. Not only is there possible, or likely, fraud going on, but the MEPs do not want even to acknowledge it. They voted to keep this report secret or confidential, whichever terminology one cares to use.

The fact that OLAF is involved is not all that reassuring, because it itself was caught with its trousers down or its fingers in the tillwhichever you choose. OLAF admitted that it lied to the European Court of First Instance over allegations that it had asked the Belgian police to look at the investigative journalist Hans-Martin Tillacks file. It told the European Court of First Instance in August 2004:

This was to ask for Hans-Martin Tillacks file. It has now admitted that it did do that. OLAF, the organisation against fraud in the European Union, actually lied to the European Unions own Court of First Instance, so the fact that OLAF is investigating possible fraud in the European Parliament does not give me any confidence. This amendment is entirely worth pursuing. Some MEPs have shown themselves to be, to use Mr Daviess words, verging on carrying out embezzlement and therefore one has to ask whether, in the words of the amendment, there is,

evidence of fraud or impropriety.

I think embezzlement is definitely fraud or impropriety. I beg to move.

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4.30 pm

Lord Tebbit: I do not want to say anything which would lose the friendship of my noble friend Lord Willoughby de Broke or indeed that of my noble friends on the Front Bench who tabled this amendment, but is this not almost a wrecking amendment? Surely no Secretary of State could ever conceivably lay before the House a statement certifying that, in his opinion, there was no evidence of fraud or impropriety in the European Parliament. Any Secretary of State who laid down such an order would be laughed out of court; it is quite impossible that any man in his right mind could do so. I suggest to my noble friend that this is a wrecking amendment, in that he is putting up an impossible barrier, and that perhaps it would be advisable if this one were withdrawn until he finds a better way of formulating what is a sensible idea, after all. But no impropriety in the European Parliament? My goodness me, we might worry if it was about a parliament or a part of a parliament a bit closer to home.

Baroness Ashton of Upholland: This has been a very interesting, though brief, debate. The noble Lord, Lord Willoughby de Broke, by moving this amendment, gives me the chance to address some of the concerns that have been raised, notwithstanding the rather clever way in which the noble Lord, Lord Tebbit, sought to make this a clearer proposition.

There is no question that it is very important to make sure that where there are concerns about personal terms and conditions and expenses arrangements for members of any parliament, but in this context the European Parliament, those are addressed. The Government expect taxpayers money to be spent correctly and support the maximum transparency on this. That does not in any way deflect from the fact that the European Parliament plays a vital role in the European Union. Its Members are directly elected and they perform an important role of scrutiny, holding the Commission to account. MEPs are effective both at raising issues of great concernfor example, climate change in recent timesand at scrutinising and improving legislation. The REACH chemicals regulation, key financial service dossiers and the mediation directivewhich I was involved in in liaison with the European Parliament and which covers mediation and civil justice issues across bordersare all good recent examples of where the European Parliament has added value, scrutinised and held to account. Strengthening the Parliaments role strengthens transparency and democratic accountability.

I listened with great care to the noble Lord and I agree that it is important to make sure that any organisation looks at what it can do to strengthen its transparency and accountability and to deal with issues, whether of perceived fraud or of propriety, for which transparency is often the answer. Noble Lords will know that the European Parliament has already strengthened requirements on MEPs to provide documentation on, for example, the use of office allowances and employing staff. Noble Lords will know also that, after the elections next year, the MEP Statute will be introduced, which will see the reform of MEPs pay to provide a standard base salary across

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Europe. It will reform the expenses and allowances system for MEPs. We in the UK have long supported the statute as a fair, transparent and substantive way forward.

However, the amendment raises a specific question: is the European Parliament a fit organisation to have the power to censure the Commission? We support this parliamentary power. Being able to hold the Commission to account in this way is an important aspect of the Parliaments power, because it is a democratically and directly elected institution. Noble Lords know, too, that the power of censure is not new; it goes back to the treaty of Rome. They will remember, for example, the tough stance of Parliament on the perceived mismanagement of funds by the Santer Commission, which led ultimately to the resignation of the whole Commission. It marked an important step in supporting improvements in the management of EC funds and generated the political impetus that was necessary for the Reforming the Commission White Paper in 2000.

So the Parliament plays an important role in holding the Commission to account. Its ultimate sanction is the power of censure. It is important that the citizens who elect the European Parliament know that, ultimately, their direct representatives in Strasbourg can dismiss the Commission. I hope that the noble Lord will withdraw the amendment on that basis.

Lord Willoughby de Broke: I am grateful to the noble Baroness for attempting to answer my concerns. I say to my noble friend Lord Tebbit that I do not accept that this is a wrecking amendment, although I agree with him that requiring the European Parliament to prove its whiteness is almost impossible. I suppose that it may be a wrecking amendment to that extent.

The noble Baroness did not answer my serious points about the alleged criminality of not just a few but a large number of Members of the European Parliament. It remains to be seen what OLAF will do about that and how many, if any, of them will be prosecuted. Will OLAF investigate its own lies to the European Court of First Instance? We do not know that. As in a lot of these debates, we have rather skated over the germane point that the European Parliamentby the admission of some of its members, particularly the Liberal Democrat MEP, Chris Daviesis riddled with irregularities and possible embezzlement.

Although I now give an opportunity to the Liberal Democrat Front Bench to support Chris Davies in his initiative to expose this nest of irregularities in the European Parliament, it is obvious that I shall not get any answer from them in spite of the bravery of their colleague. However, I do not see much point in pursuing this matter in view of the remarks of my noble friend Lord Tebbit. For the moment at least, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 13 had been withdrawn from the Marshalled List.]

Lord Howell of Guildford moved Amendment No. 13A:

Clause 2, page 1, line 12, after excluding insert

6 May 2008 : Column 459

(i) Article 1, paragraph 24, inserted Article 10B TEU, paragraph 2 on joint proposals to the Council for recommendations to the European Union on the strategic interests and objectives of the Union, unless binding arrangements have been made for the Secretary of State to report to Parliament, at least annually following the coming into force of this Act, certifying that nothing undertaken in pursuit of common policies and actions or promoted in any international forum has restricted or will restrict the independent foreign policy of the United Kingdom or otherwise conflicts with the United Kingdoms national interests in foreign and security policy; and(ii) 

The noble Lord said: We come to a whole group of amendments which covers the positioning of common foreign security policy and the foreign policy of this country within the pattern set by the proposed treaty of Lisbon. In essence, the amendments would secure something which the Government once wanted very badly out of this and the previous constitutional treaty but which they have failed to get. Perhaps that was too ambitious and we can now help them, because the Governments aim, and the clear aim of the Bill, is to try to ring-fence foreign policy and keep it firmly under national control. That is entirely creditable and makes sense in this world where, on some issues, we need tight and intimate coalitions with certain of our neighbours, allies and friends, but where the pattern changes from time to time and, on other occasions, we need either to pursue matters ourselves or seek a new alliance or coalition. The underlying aim of the Government was creditable, but they have failed and this Bill embodies their failure.

It is highly instructive to look back to the original convention, which drafted the constitution treaty where the words were born, and which we now have before us because they are identical. The essence of the matter was described well by Ministers then: it was to ensure that the European Union acts in all foreign policy issues on behalf of member states, and not the reverse. That is a very important qualification. They failed because they tried to delete the injunction that member states should,

actively and unreservedly support the Unions common foreign and security policy.

That did not work. They tried to ensure that common foreign and security policy would in no way fall, by any back door or side channel, under ECJ jurisdiction, and that with decisions under EU foreign policy there would not be grounds for appeal. They failed with that. They tried to define more clearly what common foreign and security policy was, and what the boundaries were, with regard to which issues would be reserved for national decision and which should be within the competence of the Union, the Council of Ministers and the Foreign Affairs Council. They failed in that, too. Indeed, the noble Baroness, who circulated a very helpful letter giving her views on the role and work of the ECJ as a body, mentioned that the ECJ will,

police the frontiers between CFSP and non-CFSP matters.

A gap was opened, through which all kinds of qualifications could creep.

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Ministers tried to prevent Union delegations, as opposed to Commission delegations, always representing the Union in third countries or in international institutions or conferences. They failed in that, too. Above all, they struggled to prevent the birth of a big new European Union diplomatic corps, the so-called European External Action Service, which would be ambiguously outside national or intergovernmental control. That happened too, as we know; it is in the treaty and now being planned. According to the widely reported comments of Finlands Foreign Minister, Mr Stubb, it will make the EU,

one of the worlds great actors,

and that,

all over the world there will be EU embassies.

I do not think that was the intention; we will see whether that happens. Certainly, the treaty makes clear that the European Parliament, which we have discussed, should have hearings in appointing this army of ambassadors.

All this makes one query whether the Government have had the success that they claimand as the Bill tries to ensurein keeping foreign policy in national hands. It looks to me as though they have failed. Indeed, if one looks through the history of that ill-fated negotiation during the convention, which gave birth to the words we are dealing with now, it turns out to have been a rather dismal and futile negotiation. It was certainly an incompetent one, conducted by this Government, where they walked, again and again, into various traps from which they have not yet succeeded in escaping. Reading again the transcript of those negotiations and their outcome, which is in the treaty before us now, they sound as though they were being handled by a defeated nation, and as though we had to say yes to everythingas though we had no locus and leverage at all. It was a sad episode. Chances were missed completely at the Hampton Court summit of the European Council afterwards. All the opportunities were there to restore the situation; none of them was taken.